Hospitals pay their employees less than doctors. How can this continue?

Patients generally prefer their healthcare to be delivered from an employed team, even if some nurses are compensated the same as doctors, according to a 2015 Canadian study. The advantage for patients who want…

Hospitals pay their employees less than doctors. How can this continue?

Patients generally prefer their healthcare to be delivered from an employed team, even if some nurses are compensated the same as doctors, according to a 2015 Canadian study. The advantage for patients who want physician-led care is that they are more likely to get timely, high-quality care.

And yet, according to the Canadian study, staff nurses, who drive more than half of the care provided in Canadian hospitals, experience “particularly high wage disparities” with doctors in this healthcare industry. Many nurses in Canada earn more than twice the minimum wage—equivalent to $40,800 per year. (By comparison, U.S. Department of Labor data on doctors’ pay shows that doctors are paid more than twice the minimum wage. Physicians earn $207,200 on average, compared to the minimum wage of $11.78 per hour.)

Canadian hospitals, which have been aiming to minimize wage disparities between their lowest- and highest-paid employees, are crafting efforts aimed at decreasing pay disparities between healthcare professionals. And provincial governments are holding hospitals accountable for doing this. In 2015, the Canadian province of Ontario sent a special team to hospitals to examine wage and workforce inequities between nurses and physicians in hospitals. They found that caregivers treated patients first in hospitals, with physicians receiving less attention and support. Citing staff nurse-to-patient ratios and lower salaries, the team urged hospitals to create a health care system that focuses on patients’ needs.

Toward that end, hospitals in Ontario are gradually transitioning to a system where nurses take on patient care tasks instead of administering medication.

In the United States, there are many variations in nurse-to-patient ratios across hospitals. Researchers are considering an effort to create a national standard for nurse to patient ratios.

Hospitals care for patients in a range of states. Rates of nurses’ compensation that are substantially higher than doctors’ pay in different states may very well reflect differences in the experience, training and labor-cost structure of nurses in that state.

But to focus on these differences and ignore the fact that nurses provide different kinds of care and medical skills also is not a healthy approach.

The University of Michigan’s Cass School of Business examined how hospitals that pay nurses (above and beyond minimum wage) better than hospitals that pay doctors more or less. They found that larger hospitals that had higher paid employees, particularly nurses, also have lower percentage of inexperienced nurses. According to their analysis, for every extra dollar of pay a nurse makes, a hospital needs to fill 12 percent of those jobs, compared to a national average of 6 percent. Greater compensation of nurses makes hospitals more expensive to run.

Other studies have found that hospitals that provide more training for nurses and doctors also do not pay higher wages.

Hospitals should be more deliberate about choosing and compensating their healthcare workers.

Many doctors are already making more than their counterparts do. As a result, many physicians are choosing to seek employment in smaller, rural hospitals with more restricted physician-to-patient ratios and lower pay. This creates a potential for increased hiring and retention at these hospitals, where the profitability of doctor-led care and the opportunity to provide true patient-centered care leads to higher wages for the caregivers who staff these facilities.

And these implications should influence the decisions of hospitals. The University of Michigan’s Cass School of Business examined how hospitals that pay nurses (above and beyond minimum wage) better than hospitals that pay doctors more or less. They found that larger hospitals that had higher paid employees, particularly nurses, also have lower percentage of inexperienced nurses. According to their analysis, for every extra dollar of pay a nurse makes, a hospital needs to fill 12 percent of those jobs, compared to a national average of 6 percent. Greater compensation of nurses makes hospitals more expensive to run.

Federal law mandates that states pay base rates for worker safety. Yet, no guidelines exist for worker compensation—the legal status to resolve differences in pay—between healthcare professionals, including healthcare workers who perform duties that differ from those of doctors.

When the American Health Care Act was being debated in the House of Representatives last year, Oregon Rep. Earl Blumenauer, a Democrat, advocated for the creation of a commission on skilled professionals. Before the committee passed the AHCA, Blumenauer attempted to encourage the co-sponsors of the bill to consider issues including physician-to-patient ratios and compensation for health care workers. Neither the AHCA nor any subsequent healthcare legislation has taken any action related to compensation between healthcare workers and physicians.

The healthcare system in the United States pays healthcare workers less than physicians. According to the Centers for Medicare and

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